Internet of Things: Utopia? Horror Show? Both?

Jan. 8 (Bloomberg) -- At the International Consumer
Electronics Show in Las Vegas, an annual carnival of corporate
hype and techno-hoopla, John Chambers, the head honcho at Cisco
Systems Inc., described an emerging phenomenon in terms that
were sensationalist even by Vegas standards.

“It will be bigger than anything that’s ever been done in
high tech,” he said. “It will change the way people live, work
and play.” And, oh yes, it’s a $19 trillion opportunity.

The phenomenon is commonly known as the Internet of Things.
As more and more objects -- appliances and automobiles, tennis
rackets and toothbrushes -- are wired with sensors and connected
to the Internet and to other devices, they’re pulsing with new
information and capabilities. Cisco has estimated that 25
billion devices will be connected to the Internet by next year,
and 50 billion by 2020.

The potential benefits of this evolution are compelling.
Yet as with every innovation of the digital era, it’s also
fraught with perils -- many of which we haven’t even begun to
think through.

Enthusiasts argue that connecting more and more objects
will help bring the automation and precision of the digital
world to bear on the inconveniences of the physical one.
Consumers -- who can already buy communicative door locks, pet
collars, forks, fitness monitors, light bulbs, inhalers,
thermostats and so on -- might one day see their domestic
routines unfold with Jetsons-like ease.

Retailers could use “smart” sensors to better organize
their inventory and track performance data. Manufacturers could
improve logistics, reduce waste and boost productivity. And city
governments might benefit from smart roads that monitor
congestion, trash cans that tell garbagemen when they’re full or
parking meters that ping drivers when a spot opens up.

What could possibly go wrong?

For starters, like any new technology, such devices will be
prone to malfunctions, which can be pretty alarming when it
comes to your home appliances or your car. It’s also unclear how
much this evolution is being driven by real demand -- have you
ever thought to yourself: “This toothbrush is awesome, I just
wish it could communicate with my smartphone"? -- and how much
by the relentless hype cycle of the technology business. Many
devices now use smart technology whether you like it or not.

More alarming are the twinned perils of the networked age:
security and privacy. The Internet of Things could extend both
dangers from the virtual world into the physical one in new and
unpredictable ways.

Many connected devices are manufactured by companies that
have no experience in warding off online intrusions, and
consumers often don’t bother to download security patches. The
results are predictable. Hackers have easily exploited
electronic security systems in cars, used a flaw in electronic
locks to break into dozens of hotels rooms and compromised all
manner of home appliances. One deviant hacked a baby monitor and
said disgusting things to a 2-year-old. Researchers have warned
about vulnerabilities in home routers, medical devices and
industrial systems. You probably don’t want to think about the
implications of an attack on a smart toilet.

To say that worse intrusions are inevitable isn’t to be
alarmist; it’s to acknowledge that cybersecurity is a deeply
imperfect science that’s about to face a lot of new challenges.

Protecting privacy will also get harder -- and the
government isn’t the only snooper to worry about. When companies
want to collect data about everything you do in exchange for an
app or service, chances are their motives aren’t entirely
altruistic. A good tipoff to their true intentions is that
advertisers are licking their chops at CES this year. When
everything from your front door to the car you drive to the
shops you visit collects and stores data about you, your ability
to control any of it -- let alone escape from relentless
marketing -- looks harder and harder.

So what to do?

Market-based solutions to these problems would be welcome,
but in practice they’ve proved elusive. It’s hard to be a
rational consumer, for instance, when so much data is being
collected about you surreptitiously, often explained (if at all)
in small-print legalese. Mozilla, the nonprofit behind the
Firefox Internet browser, is onto something in this regard with
an add-on called Lightbeam, which shows users who’s tracking
them as they move from site to site. Such technology will need
to get a lot more sophisticated, and a lot more widely adopted,
before it spurs companies to take privacy seriously as the
Internet of Things expands.

In the meantime, hardware engineers should get used to
incorporating better security into their designs. Manufacturers
should be far more vigilant about online threats to their
products. The government should require companies to be more
transparent about what data they collect. And the poor,
bewildered consumer should heed one other thing John Chambers
said. The Internet of Things, he told the crowd, ‘‘changes
people’s lives forever.”